She knows that her retirement goals are unreachable with the low-interest rates available. It’s tough with rates on savings accounts of one to three percent. She had nothing left after taxes and inflation! That’s when she discovered non-performing note investing. She was excited and relieved to learn she can buy non-performing notes at pennies on the dollar.
What is a non-performing note?
The most popular note right now with real estate investors. The non-performing note is essentially a note that is in default and can no longer expect repayment against the original terms of the note. What makes non-performing notes so attractive to a buyer is the opportunity to purchase the asset at a deep discount. From there you, the investor, can decide to re-work the note or take back the asset.
Here’s a recent example of a recent Non-Performing Note that became performing! Paige Panzarello bought the Note for $50,000, and the borrower owes $204,000. We agreed to a forbearance agreement (a trial payment plan) where the borrower pays a $5,000 reinstatement fee and $950/month for 12 months. If she pays on-time for 12 months, we will reduce the amount owed to $154,000 (the CMV) permanently, and help her to refinance through FHA for 97.5% of CMV. Great net profit, and the BEST PART: We helped a Single lady and her children to stay in their home and saved her from foreclosure on her credit. WIN-WIN-WIN!
Here are a few things to consider when an Investor Looked in the Mirror
- Are you a good researcher? You want as much information as possible to accurately evaluate the deal. You will need Important documents like the original note, all related amendments, and any assignments.
- Look in the mirror. Does it show that you can work with people? You must work with the lender to procure as much information as possible about the underlying asset (the home). The lender will probably have extensive records of the property. As you receive more information, you will be able to accurately evaluate the investment opportunity.
While this is a short list of considerations, Paige Panzarello is the expert. She has spent years working with non-performing notes and passing that knowledge to others. There are plenty of opportunities to attain high returns with these types of investments, but you need to know what Paige knows before you lay invest.